Financial years

Financial years divide a company’s books into accounting periods. Every journal entry belongs to one financial year and is dated inside it, and a year must be open to take entries. At year-end you close the year: TrakIT moves its profit or loss to retained earnings and locks it.

Financial years are kept per company, on the Financial Years tab of Admin > Masters > Finance Masters. Choose the company at the top of the tab. The list shows each year with its Start Date, End Date, who created it, and who closed it and when, or Open. Closed years are grey.

Financial years are also useful to companies that do not keep their books in TrakIT: the Quotations, Invoices, Bills, Internal postings and Accounts lists can show one year at a time. See Financial years on other pages.

How financial years work

• Years follow each other with no gap and no overlap: each year starts the day after the previous one ends.
• A year is one year long, or nine or six months.
• A company can have at most two open years at a time, for example the current year and the next. To create a third, close the oldest first.
• A year cannot be changed or deleted once created.
• Years are closed in order, oldest first, and a closed year cannot be opened again.

TrakIT names each year from its dates: FY2026 for a year from 1 January to 31 December 2026, FY2026-2027 for a year that runs into the next calendar year, and FY2601-2606 for any other period within one calendar year (here, January to June 2026).

Create a financial year

1. Select Admin > Masters > Finance Masters, then the Financial Years tab.
2. Choose the company.
3. Select Create New FY.
4. For the company’s first year, enter the Start Date. For any later year, the start date is the day after the previous year ends and cannot be changed.
5. Check the Period: One Year, Nine Months or Six Months. Only system administrators can choose a period other than one year.
6. Select Create.

The year ends the day before the same date one period later: a one-year period starting on 1 April 2026 ends on 31 March 2027.

Create New FY appears only while the company has fewer than two open years. The first year can be created only once the company’s default currency is set (see Setting up accounting).

Choose the start date of the first year carefully. The opening balances are posted on that date, and no document or entry dated before it can reach the books.

Create each new year before the current one ends. A document dated after the end of the last year cannot be posted, so it cannot be finalized, until a year that covers its date exists.

Posting into a year

An entry can be posted only into an open year that covers its date. TrakIT never moves an entry into another year.

Entry	Its date	Its year
Invoice, credit note, bill	The document date	The open year that covers the date.
Receipt, payment	The transaction date	The open year that covers the date.
Internal posting	The posting date	The open year that covers the date.
Invoice write-off	The write-off date you choose	The open year that covers the date.
Adjustments on an invoice or bill	The document date; a later change, the day of the change	The open year that covers the date.
Entry posted by hand	The date you enter: not in the future	The year selected on the Journal Entries page. The date must fall within it.
Opening balances	The first day of the first year	The company’s first year.
FX revaluation	The date you choose: not in the future	The open year selected on the Journal Entries page.
Year-end closing	The last day of the year	The year being closed.

If no open year covers a document’s date, because the year does not exist yet or is already closed, the document cannot be finalized, and the message says so. Create the year, or check the document’s date.

Closing is the only lock in the books. While a year is open, entries can be posted on any of its days, including earlier months. Invoices have their own limits on back-dating, set for your company: see Invoice.

Close a year

Closing is the formal year-end. Before you close a year:

• its end date must have passed: you can close it from the next day;
• the next year must already exist;
• all earlier years must be closed;
• the company needs a retained earnings account: an active child account whose Special Code is RE (see Setting up accounting).

To close a year:

1. On the Financial Years tab, choose the company.
2. Select Close FY. TrakIT shows the oldest open year: that is the year it closes.
3. Read the message, then select Close FY.

If something is missing, TrakIT says what, and nothing changes.

What closing does

In one step, which either completes or leaves everything as it was:

1. TrakIT works out the year’s balance of every active revenue and expense account.
2. It posts a closing entry, Year-End Closing - followed by the year’s name, dated the last day of the year. The entry brings each of those accounts to zero and puts the net profit or loss on the retained earnings account. For an account held in a foreign currency, it also brings the currency balance to zero.
3. It marks the year closed, with your name and the date.

If the year had no revenue or expense, TrakIT closes it without an entry.

After closing

• Nothing more can be posted into the year, by hand or from documents, and New Entry and FX Revaluation no longer appear on the Journal Entries page for it.
• No entry of the year can be reversed. A document whose entry is in a closed year can no longer be reset or un-finalized, and its adjustments can no longer change the books. Correct it with an entry dated in an open year.
• Once the first year is closed, the opening balances can no longer be changed.
• The reports still show the year. The Profit & Loss leaves out the closing entry, so a closed year still shows its result. On the Balance Sheet, the year’s result is now part of retained earnings.

Close each year once its books are final. Until all earlier years are closed, the Balance Sheet of a later year does not balance: their profit has not reached retained earnings yet, and the Balance Sheet warns you.

Year-end checklist

1. Finalize, or resolve, every invoice, credit note, bill, receipt, payment and internal posting dated in the year.
2. Check the bank and cash accounts against your bank statements.
3. If the company works in other currencies, run the FX revaluation as of the last day of the year: see Multi-currency accounting.
4. Check the Trial Balance as of the last day of the year: debits and credits must be equal.
5. Make sure the next year exists.
6. Close the year.
7. Check the Balance Sheet as of the last day of the year.

Financial years on other pages

• The Journal Entries, Trial Balance, Balance Sheet and Profit & Loss pages show one year at a time. They start on the open year that includes today, or the latest open year if none does, or the latest year if all are closed.
• The Quotations, Invoices, Bills, Internal postings and Accounts lists can show the documents dated in one year, or – All FY –. They start on the open year that includes today, or the latest open year, or all years if none is open.

Who can manage financial years

Section	Permission	Allows you to
Finance Masters	Read	See the financial years.
Finance Masters	Open/Close Financial Year	Create and close financial years.

Only system administrators can create a year shorter than one year.